Credit score went down in one month.

guest_999 said:
It is a common myth among many cc users. Using more than 30% of your combined credit limit of all CCs for 1-2 months isn't going to affect your credit score beyond 4-5 points as long as you pay all the due amt on or before due date.
@vishal_k
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He was paying off only the minimum due at the end of each cycle, that's why.
 
PunkX 75 said:
He was paying off only the minimum due at the end of each cycle, that's why.
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Yes that's the reason not just high credit limit utilization. Even if he had 2-3 more cc with higher limits which would have lowered his credit utilization ratio the significant drop would still be there.
 
PunkX 75 said:
He was paying off only the minimum due at the end of each cycle, that's why.
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I asked a friend of mine who used to work as credit card salesman and he said as long as you make the payment even the minimum the CC company does not care , your score would be the same as long as you keep paying them. And i did confirm this with another guy who haven't made a single full payment in 8 months his score went from 739(last year) to 760 now.
 
NikhilSingh25 said:
I asked a friend of mine who used to work as credit card salesman and he said as long as you make the payment even the minimum the CC company does not care , your score would be the same as long as you keep paying them. And i did confirm this with another guy who haven't made a single full payment in 8 months his score went from 739(last year) to 760 now.
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It also depend on credit bureau's algorithm being used at the time. For example, experian recently changed its algorithm leading to a drop of around 100 points in many ppl experian score while still having good cibil score as usual.
 
guest_999 said:
It also depend on credit bureau's algorithm being used at the time. For example, experian recently changed its algorithm leading to a drop of around 100 points in many ppl experian score while still having good cibil score as usual.
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That could be the reason why my score went down that much.
 
guest_999 said:
It is a common myth among many cc users. Using more than 30% of your combined credit limit of all CCs for 1-2 months isn't going to affect your credit score beyond 4-5 points as long as you pay all the due amt on or before due date.
@vishal_k
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Didn't knew that. I never went beyond this limit in past 11 yrs. Through credit card, I spend only that much amount which I can pay through debit card. Only difference is I gain some additional interest through sweep in facility till next bill date.
 
If you keep paying only the min. due amount and think your are paying off the entire bill which is illogical is obviously going to affect the credit score few months down.
As for credit utilization, if you are constantly using up to 50% quite often and occasionally beyond 50-60% and ensure to timely/before due date pay the entire bills the score never gets affected. My personal exp.
 
NikhilSingh25 said:
I asked a friend of mine who used to work as credit card salesman and he said as long as you make the payment even the minimum the CC company does not care , your score would be the same as long as you keep paying them. And i did confirm this with another guy who haven't made a single full payment in 8 months his score went from 739(last year) to 760 now.
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If your utilization stays beyond 30%, and you only pay off the minimum due, your score will drop at some point.
 
I m also fairly new to credit cards.
I have a doubt reagrding the limit.
Lets say i have a 80k limit on my card.
And i buy something worth 50k today.
Now another product that is at a very nice discount catches my eye, for the sake of argument, lets price it at 40 or 50k.
Will i be able to pay for it using the card? Since i m over the monthly limit now.
If so, will i get charged some ungodly interest \fine on it.
 
awestorr said:
I m also fairly new to credit cards.
I have a doubt reagrding the limit.
Lets say i have a 80k limit on my card.
And i buy something worth 50k today.
Now another product that is at a very nice discount catches my eye, for the sake of argument, lets price it at 40 or 50k.
Will i be able to pay for it using the card? Since i m over the monthly limit now.
If so, will i get charged some ungodly interest \fine on it.
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i doubt you will be able to make the payment. CC will just decline the payment.
 
awestorr said:
Will i be able to pay for it using the card? Since i m over the monthly limit now.
If so, will i get charged some ungodly interest \fine on it.
Click to expand...

This depends on the over limit feature of your card. It is usually a percentage of the card limit like say 5%.

If your spending goes above the credit limit offered to you, but below 5%, the transaction will go through and you will be charged a fee and some interest I believe.

It is best to read this in the MITC (Most important Terms and Conditions) document they would have given with your card.

You can usually disable this feature. The steps for that would also be in the same document.
 
awestorr said:
I m also fairly new to credit cards.
I have a doubt reagrding the limit.
Lets say i have a 80k limit on my card.
And i buy something worth 50k today.
Now another product that is at a very nice discount catches my eye, for the sake of argument, lets price it at 40 or 50k.
Will i be able to pay for it using the card? Since i m over the monthly limit now.
If so, will i get charged some ungodly interest \fine on it.
Click to expand...
Technically you can.
You buy a product worth 50k then pay the amount on your credit card to reset the limit. You dont wait for the bill generation, just pay your due on the same day that you used your credit card.
Your credit usage will be 0 if you do this.

But the major issue is, sites like Amazon, Fk allow only 1 time use per day of a card to avail a discount during a specific sale sometimes. If this clause is absent from T&C then simply use the trick above.
 
Afxal said:
Technically you can.
You buy a product worth 50k then pay the amount on your credit card to reset the limit. You dont wait for the bill generation, just pay your due on the same day that you used your credit card.
Your credit usage will be 0 if you do this.

But the major issue is, sites like Amazon, Fk allow only 1 time use per day of a card to avail a discount during a specific sale sometimes. If this clause is absent from T&C then simply use the trick above.
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are you sure about the montly limit resetting if i pay the amount before.
 
I missed on a payment couple of months ago and my score dropped by some 50-60 points and now its back to what it was.
Its different for every individual/accounts as to how many cards and loans you have and your past payment pattern.
 
awestorr said:
I m also fairly new to credit cards.
I have a doubt reagrding the limit.
Lets say i have a 80k limit on my card.
And i buy something worth 50k today.
Now another product that is at a very nice discount catches my eye, for the sake of argument, lets price it at 40 or 50k.
Will i be able to pay for it using the card? Since i m over the monthly limit now.
If so, will i get charged some ungodly interest \fine on it.
Click to expand...
Dont do that, either it will be declined and if, the CC allows over utlisation, there will be penalty. So do not do it !!!
The only thing which is possible is to make immediate payment of your usage and then use it, however, now with BPPS coming in picture, you wont be even able to prepay anything now.
So, nothing can be done now.
 
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